The data this week for manufacturing ISM and nonmanufacturing ISM continues to show that the service sector in the US economy is in good shape, see chart below. And with the service sector making up 85% of total US employment, the broader economy should still be fine. Combined with ADP for October at 182k we continue to see little spillover of the problems in the manufacturing and energy sectors to the rest of the economy. Put differently, if nonfarm payrolls on Friday come in around 180k then it will be a strong sign that the modest slowdown in employment growth in August and September was temporary, and likely driven by the China-associated turbulence seen in markets in August. With S&P500 and VIX back at pre-August levels we should continue to see solid economic data going into the December FOMC meeting. For more discussion see also my monthly chart book I sent out yesterday.